Hyundai Motor India Reports Slip in Profits Despite Strong Sales
Hyundai Motor India announced on Wednesday that its consolidated net profit for the second quarter fell by 24% compared to the same period last year. The decline, attributed to rising raw material costs, comes even as the company achieved record sales. The net profit for the quarter ending September 30 was reported at ₹1,196.2 crore, down from ₹1,572.3 crore a year earlier.
Challenging Margins
Despite the profit drop, Hyundai’s revenue increased by 19% year-on-year, reaching ₹20,696.1 crore. However, earnings before interest, tax, depreciation, and amortization (EBITDA) saw a decline of 19%, totaling ₹1,974.5 crore. The EBITDA margin also shrank, decreasing to 9.5% from 13.9% in the same quarter last year. The company noted that challenges from commodity prices impacted profitability, though initiatives to reduce costs and operational efficiencies helped improve the margin sequentially.
Tarun Garg, the managing director and CEO of Hyundai Motor India, described the quarter as significant, pointing out that it was marked by record sales and quarterly revenues exceeding ₹20,000 crore for the first time in the company’s history. He acknowledged that high raw material costs affected profit margins during the quarter.
Record Sales Amid Challenges
Hyundai recorded its highest-ever quarterly sales, with total vehicle sales hitting 219,072 units. Domestic sales rose by 19%, partly fueled by a notable increase in sales in rural areas and a record contribution from CNG vehicles. Looking ahead, Garg anticipates that while overall industry growth may slow in the latter half of the fiscal year, Hyundai aims to grow sales by 8-10%, driven by two new launches in the rapidly growing SUV market.
Future Outlook
In terms of exports, Hyundai experienced a 4% growth year-on-year and an impressive 38% rise sequentially, despite global challenges. The company projects double-digit growth in exports for the second half of the year, particularly in markets like Mexico and Latin America. The newly launched SUV, Bayon, is set to commence exports in the upcoming quarter.
Garg expressed optimism about the second half of the year, indicating it would be a time of increased momentum for the company. He highlighted that the launch of the Bayon signals the start of a promising product cycle, along with plans for a mass-market electric vehicle (EV) debut in the fourth quarter. While the company continues to navigate economic uncertainties and cost pressures, the focus remains on strengthening its position in key market segments and achieving sustainable growth and profitability.
On Wednesday, Hyundai Motor India’s shares experienced a slight increase, closing 1.13% higher on the BSE at ₹1,875.
